The broken treaty process is a conspicuous illustration of a major impediment to the expansion of British Columbia’s economy. The Enbridge Northern Gateway Pipeline debacle is its latest casualty.

In 1992, the federal and provincial governments created the BC Treaty Commission (BCTC) to facilitate the negotiation and settlement of treaties in British Columbia. Twenty years and an estimated $900-million later, a grand total of three treaties have been signed. Sophie Pierre, the Chief Commissioner, told me that the commission could be around for another 20 years.

Market View

Energy

Unsettled land claims are a quagmire, and the perpetual uncertainty over ownership and control of the land has stopped resource development. This should be a wake-up call to policy makers.

Aboriginal rights and title are protected by the Constitution, and confirmed as a concept in common law. The courts have repeatedly encouraged governments to deal with these claims. Politically at least, Ottawa and Victoria have not shown an interest in resolving these issues. Governments don’t appear to appreciate the economic damage their procrastination has inflicted. Some politicians are skeptical of treaties and prefer to pretend there’s no need for them. That’s a delusion. The Northern Gateway fiasco is an example of the extraordinary costs we endure for government inattentiveness.

Most reasonable Canadians would agree that moving our energy resources to customers in new markets is in our national interest. The Northern Gateway Pipeline proposal was designed to fill part of that need. Yet it was left to Enbridge to do all the heavy lifting. There has never been a coherent and co-ordinated approach from the federal, Alberta and B.C. governments to deal with the file. This has not only jeopardized this pipeline proposal, but any others for the foreseeable future.

Despite the fact that the constitutional requirement to consult with and accommodate first nations resides with governments and may not be delegated, Enbridge was left alone to negotiate and secure no less than 43 agreements with individual first nations along the environmentally treacherous 1,177-kilometre proposed route. The first nations want to talk about aboriginal rights and title, topics open only to governments. Enbridge can offer only economic participation and environmental safeguards – necessary but hardly sufficient.

Creating modern treaties is a fundamental precondition for the development of B.C.’s resource economy. And no one should be under any illusions: First nations have an effective veto over any development on their “traditional territories.”

Jock Finlayson of the Business Council of B.C. reminded us last month that 80 per cent of the province’s international merchandise exports consist of resource goods. It is also central to the government’s capacity to generate revenues to pay for programs and services we expect. That underlines the significance of these issues since 100 per cent of all Crown land in B.C. is covered by unresolved and often overlapping land claims.

Modern treaties purge the insidious dependence of the arcane Indian Act, which has been an immovable obstruction to the health, prosperity and independence of Canadians under its grip. This law is a relic, and is a scar on Canada as a whole. “Indians,” as the law of the land calls them, crave to be full-fledged participants in Canadian society, not legislated wards of it.

PricewaterhouseCoopers estimated that the net economic benefit (in 2009 dollars) to Canada of settlements is at least $14.5-billion. The faster the pace of settlements, the greater the economic benefit.

The truth is that it is difficult to quantify the opportunity cost of unresolved claims. But common sense tells us that PwC’s analysis is conservative and only scratches the surface. Valuable lands and the awesome human potential of a great people are locked in a bureaucratic, legal and political purgatory.

In the early 1990s, uncertainty over Quebec, fiscal policy and regulatory burdens were the reasons that capital markets attached a “Canadian discount” to transactions. While there has been some meaningful improvement, the time is now for Ottawa and Victoria to remove the barriers that remain such a deep structural drag on development in much of Canada’s heartland.

Prime Minister Stephen Harper and B.C. Premier Christy Clark should put the full weight of their governments behind restarting the stalled treaty process. That will require real commitment, flexibility and openness. But the rewards to Canada’s social and economic well-being are boundless.

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